BOJ Sinks Nikkei 225 as oil floats higher…

FTSE indices traded lower at the open, after weaker sentiment travelled from Japan overnight (Nikkei -3.32%)as the FTSE 100 recovered losses in late trade, closing +0.04%. The weaker sentiment came as expectations of further monetary easing were crushed, as the Bank of Japan committed to no further monetary policy measures for the time being. Therefore, annual asset purchases remain unchanged at ¥80tn, with the policy rate at -0.1% and the rate of ETF purchases unchanged. This spiked a large rally in the yen to 108, as the dollar slipped 2.6% against the Japanese currency.

Despite the proliferation of weaker sentiment, the FTSE 100 index was well supported by a handful of good earnings reports and a rally in energy companies with Brent crude posted highs not seen since November last year – briefly trading at $47.71/bbl before consolidating about the $47.60/bbl level.

Anglo American (+8%) traded higher as it announced the sale of its phosphate and niobium assets to China Molybdenum for $1.5bn. Investors bought into the miner as it should improve the earning-debt ratio of the company. The sale will push net debt to $11.3bn, based on 2015 earnings before interest taxes, depreciation and amortisation, minus the assets its selling. This should yield a net debt-EBITDA ratio of 2.4, below the 2.5 ratio Anglo has targeted. Today’s price action provide the stock with more momentum, as it stands 143% up year-to-date. Other energy companies to trade higher included Tullow Oil, Rio Tinto and Ophir Energy.

Weir Group closed the day almost 8% higher after issuing a bullish trading statement. It described Q1 trading being slightly ahead of expectations, supported by cost reductions and a resilient Minerals performance as full year expectations remained unchanged.

At the close European indices were mixed with the FTSE 100 +0.04%, with the CAC 40 -0.04%, and the DAX 30 +0.21%.